The present invention relates to mail sorting and distribution system and method and more particularly, to a system and method, for example, in the private sector, wherein bulk mailers and private mail service companies utilize a network system to increase handling and cost efficiency of mail processing.
In certain industrialized and automated countries, mail processing is performed primarily by a federal or public mail processing entity, the entity often having a monopoly to collect, sort, transport, distribute, and deliver mail. This process is usually funded via collection of postage. In some countries, notably the United States, this process is augmented by work-sharing, wherein major mailers and/or service bureaus preprocess mail via computers or computer-based automation in order to facilitate efficient processing of mail. Work-sharing performed by major mailers, service bureaus, or other third parties, is known in the United States as presorting for discount. A postage discount is earned via preprocessing mail by performing a certain level of barcoding and sorting of the mail before entry into the public postal authority or postal service.
The requirements for worksharing can be met by data processing using mailing lists and/or databases at or prior to the point of mail creation, or by a combination of software driven systems and automation after mail creation. Both methods achieve the objective of applying a barcode which is standard within at least a national framework, and presorting at the point of origin or creation of the mail. In private, mail-like systems, such as private express carriers and courier services, an equivalent relationship exists between customers or mailers and service providers through contracts or rule-based processes in which savings are achieved in xe2x80x9cmailingxe2x80x9d or shipping costs when the customer (1) uses standard labels/manifests and organizes the shipment according to weight, volume and type; (2) meets certain volume requirements; and/or (3) uses certain pickup or deposit points to facilitate the physical entry of the items into the service system at the point of origin. As will be seen, such practices are relevant since the present invention can be applied to postal systems, whether public or private, and to competing private networks to good effect.
Presorting operations are typically located in major metropolitan areas where mail is created and entry into the postal service is done locally. Where a company owns more than one service bureau in separate geographical locations, the current operating process is substantially the same as if the bureaus were independently owned. Presorting cooperatively with the federal post is relatively efficient as a result of post-driven standardization of addressing, machine readable codes, and rules for sorting to levels compatible with the delivery system used by the federal post, particularly in the United States and Europe.
Efficiency includes at least the ability to (1) sort and code mail with a high piece rate/man-hour by automation and (2) achieve predictability of arrival at the destination address as measured from the time of entry into presort bureaus or into federal post processing centers. Predictable arrival time is important for mail with a time dependent marketing message, allowing businesses to coordinate fulfillment and product distribution processes in order to maximize sales, service, and customer satisfaction, or for financial transactions, such as billing or payment events.
Available data demonstrate that preprocessing of mail is cost-effective for all involved since cost avoidance by the federal post is greater than discounts available and/or permitted by regulation or postal rates approved by rate making authorities. At the same time, the discounted cost of postage represents a savings to mailers and is sufficient to compensate for value-added processes contributed by presort functions.
Greater efficiency can be obtained, however, by 1) further improving productivity of the overall presort function on a network basis, 2) information exchange between presorters or cooperative major mailers, and 3) improving predictability of delivery by process changes that permit entry of presorted mail into the federal post at destination points closest to the destination address. The present invention describes the physical processes, information processes, and financial arrangements which make possible improvements in both productivity and predictability. The new processes described should be of interest to mailers whose communications are time dependent and for whom the separation of such mail from general collection mail, which may not be so time dependent, inherently provides for expedited and efficient processing and delivery of mail, whether or not processing is done within or external to the federal post. Similarly, productivity and service enhancements will be attractive to bureau operators in view of competitive advantages of network members over non-networked operations. In some cases, economic gain from efficiencies inherent in the new network process will be enhanced through changes in rates designed as incentives to reward the new value created by the process.
Current public and private network process methods employ exception item processing for reading addresses and obtaining appropriate bar codes in cases where automation-based optical reading technology is used to accomplish address reading in real-time machine processing. Semiautomatic methods include on-premises and remote encoding methods, both of which use image-lift data captured during automated processing. Image data is identified via an identification (ID) number, which is printed on the individual mail piece and is later used to match exception item coding results with the physical mail piece/item. In remote encoding cases, images are transferred from a particular process node to a remote site(s) where computer databases and keyboard CRT stations enable operators to enter otherwise unreadable information to obtain desired bar code information. This information is then relayed back to the original presort center (process node) where, in a subsequent process, bar code information is printed on the appropriate mail piece/item using an ID number as a matching device. This process will change under information based network processing systems as a result of the changes inherent in the new physical process method.
In the network based mail processing system and method of the invention, the originating presort bureau or node is defined as the first bureau to receive and process mail, usually near the point of creation. In the following, the term presort bureau is used to connote a service bureau or any other entity which is a) part of the enterprise network, b) processes mail created and entered by itself or by mailers it services, and/or c) processes mail interactively with other network nodes. As such, for purposes of simplicity in this description, the term presort bureau includes, for example, a private mailer whose originating mail may be entered by itself into the network. It may also enter mail/item volumes processed under agreements with other mailers not otherwise involved in the network process.
Further, the term presort bureau or node includes entities which create, manage, communicate and process hybrid mail. Hybrid mail occurs when data is created at one or more points of origin, sorted in data form, and transmitted through shipment of data media, such as CDs, DVDs, or data tapes, or via standard communications or satellite networks in data blocks or packets to destination points, where it is converted into physical mail or mail-like items and sorted or merged with other mail for delivery or for entry into destinating end process centers for delivery. Clearly, hybrid mail or hybrid mail-like items have both data message and physical message character. For purposes of the present invention, xe2x80x9cmail itemsxe2x80x9d refers to physical or hybrid mail pieces such as letters, flats and packages, and the foregoing mail-like items.
This originating end presorting bureau performs two major physical processes. First, it processes mailings and, using standard sorting schemes, separates national distribution components from local distribution components. This process differs from current practice in the makeup of the separation of the national distribution expressed in terms of sort scheme structure as follows. The national distribution is changed and simplified by sorting the national distribution component into batches that correspond to a finite number of destination processing centers which may be other presort bureaus whether affiliated or independent, as well as certain cooperating major mailers who barcode and/or presort mail. Hence, the national distribution scheme composition or makeup will not be defined by a subset of the zip code, such as the first three digits, for example, which is common in previous processing methods, but rather by the architecture of the network of cooperating presort bureau entities.
Although creation of batches of mail wherein each mail piece is sorted to three or preferably five common zip code digits at the originating end is the basis for postal discounts, it is contemplated according to the invention that each destination presort bureau or processing center would have an associated predetermined set of destination codes such as zip codes, and that transfers from other centers would be used to concentrate larger numbers of mail pieces having those codes at that center. This results in more batches which qualify for maximum cost savings and this reduces postal costs as compared to entering the mail pieces in an unsorted condition at the originating federal postal processing center. More importantly, it also results in substantial savings on postage as compared to the batches that could be obtained with each processing center operating independently with the mail it receives directly from originators. According to a preferred form of the invention, in order to minimize transportation costs, each destination presort bureau or processing center is also physically proximate to (in the same region as) the federal postal processing center to which mail having that predetermined set of destination codes would be sent for distribution to local post offices within the federal postal system. In terms of regions, each destination presort bureau or processing center is preferably in a region that includes the destinations identified by most or all of the predetermined set of destination codes.
Each originating presort bureau node or processing center, with few exceptions, also has a role as a destination node for the network using separate sort schemes for local distribution. Local distribution sort schemes will be substantially similar to prior art sort schemes, except, as will be seen subsequently, that the schemes will be processing larger volumes of destination mail. These larger volumes result from the modified process by which distribution for destination end entry is performed by each participating bureau (or cooperating presorting mailer) for all the other bureaus involved in this new networked facility processing method. From an automation standpoint, the new process reduces the number of national sortations required by any one participating presort entity and increases the density of mail volume in the remaining sortation schemes for destination or local distribution processing. It may increase the number of destination sorts.
In cases where a particular mailing has solely local distribution addresses, the difference between the process of the invention and current processing is minimal, except that efficiencies are still possible because inbound mail from other presorting entities will be combined with the subject mailing to achieve higher performance per man-hour and per capital equipment resource used. Additional efficiency can be obtained by scheduling the timing of national and local distribution processing steps in accordance with information available from the parallel information network next described.
In prior art practice, mail is metered with a date representing the day of entry into the federal post. The date is important as the difference between the entry date and the delivery date measures transit time and time-service quality. In a further aspect of the new network process of the invention, two entry dates are used. The first date is the date of entry into the private process network; the second date is the date of entry into the federal post. Both dates, combined with the delivery date to the addressee, enable measurement of time-service performance of the network, the federal post, or both. The objective of network time-service performance is to provide mailer/customers a transit time from network entry date to delivery date, which is less than the transit time from federal post entry date to delivery date for a non-network mail piece mailed between the same origin/destination points as the network mail piece. Network time-service performance can generally be better (shorter) than time-service performance of non-network mail pieces since the network provides custom handling, optimization benefits, and destination entry, all of which produce transmit/process times lower than those experienced by mail pieces entering the federal post at the origin end.
Permit mail may be accounted for at the originating end. Processing may be done with all permit mail entered at the originating end processing and distribution center (xe2x80x9cPandDCxe2x80x9d) of the federal postal service as at present. Optionally, the permit mail can be treated like other mail and separated into local and national distribution components. The national distribution components will be processed at the destinating end to achieve maximum presort discounts. The allocation of discounts on permit mail to the mailer, originating presorter, and destinating presorter will be managed by a financial clearing office (xe2x80x9cFCOxe2x80x9d) under the network cooperating agreement. The method of allocation will be subject to federal post review to ensure that 1) permit postage revenue is protected, 2) discounts are earned, and 3) mailers"" interests are protected.
An information process useful for implementation of the physical processes described above is as follows. A data network linking cooperating bureaus makes possible exchange of data relating to arrival times of entry mailings, content of said mailing volumes and destination subsets, and projected time of departure and/or arrival of said mailings at other network processing centers. Data parameters can be used such as statistics of address makeup, including distinction of machine unreadable handwritten mail from machine printed mail, and characteristics of each in terms of font, style, contrast, background reflectance, as well as information content of addresses. Linkage between data in the information network and the physical mailing is established by definition of physical batches with attendant labeling, which labels are affixed to containers and/or sub-containers, such as trays or cartridges.
At a specified point in the physical processing of entry mail, the local originating node process computer builds a data file with a standard format of the content of mail batch(es) processed during the predetermined period. This data file will be further divided into sub-files for transmission to each processing center node in the physical network. It can be seen that sub-files arriving at a processing center from other preprocessing centers in a given period will be accumulated for data processing by the receiving center in advance of mail batch arrival, so as to establish dynamic sort plans for handling mail batch(es) when they arrive. Statistical estimation models can establish the expected arrival time of various batch(es) so that local processing operations can be optimized to predicted arrival times. Utility of these statistical estimations is enhanced since their nature is identical for every processing center, the only differences being in data content and variations resulting from the random makeup of mail arrivals from other cooperating presort centers.
In one embodiment, the financial process implemented in connection with the system and method of the invention is centralized at a common data processing location for the cooperating presort processing centers, or may be de-centralized by replication and distribution at each presort centers (process nodes). The financial process determines, through modeling algorithms, the value-added by each process center in terms of volumes processed at national distribution and local distribution levels. It distributes payment for that value-added in proportion to the total value-added of the network group. Underlying the financial process is the concept that a normalized value-added calculation can be used as a basis for compensation of each party out of payments received for processing. Put another way, the payment system rewards productivity resulting from differences in efficiency and the attendant process cost content stemming from network and discrete node process optimization, differences in performance levels of automation and process management, and worker performance. Payment is based on mutually agreed benchmarks for value-added from a given level of sortation, transportation, and volume processed. Bureaus operating above the xe2x80x9cbenchmarkxe2x80x9d will tend to have higher margins than bureaus performing below the benchmark. It will be understood, however, that the financial system and process according to the invention is a method of allocating costs among the network participants and preferably does not interfere with the relationship between each presort center and its mailer customers.
The network managed process of the invention can also improve product and material distribution networks whose function is to manage items originating in factories and destinating in retail outlets or other factories. The environment includes at least the current system for discounts available for preprocessing and destination entry of mail pieces. It may also include processing of mail-like items where the process can be applied to private express carriers with distribution, fulfillment, and delivery systems. In federal postal mail processing, discount systems for preprocessing services is well defined by the Domestic Mail Manual and regulations promulgated by the postal service as permitted under the statutes and with an established rate making authority. The invented processes do not eliminate current private processing operations, but rather improve current functionality by inherent advantages of new processes described herein. It will be clear that network processing optimization described in the context of present private processing centers applies to public or federal post networks as well.
Physical process network items, described in the following for clarity as mail items, are delivered to an initial processing point that could, for example, be a local presort bureau nearest to the point of mail creation. In general, the mail will have two components, a national distribution set of delivery points and a local distribution set. These components are somewhat variable in definition, but generally, local distribution is defined as the set of delivery points serviced by the local federal post process and distribution center (PandDC) and its allied delivery units. The national distribution is therefore all other delivery points serviced by other PandDC""s and their subordinate offices, such as associate area distribution centers (AADC""s). This process applies to all mail or mail-like items, and also applies where a separate processing or distribution network has been established for flats and parcels. xe2x80x9cMail-likexe2x80x9d items are understood to mean items handled by private networks and distribution systems, such as those managed by Federal Express, DHL, UPS, and others.
Thus, in one embodiment, the invention includes a method of distributing mail-like items comprising the steps of: collecting mail-like items at one of a plurality of regional processing nodes, each of the regional processing nodes corresponding to one of a plurality of J geographical regions; sorting the mail-like items by destination for distribution within the region corresponding to the regional processing node in a preliminary sort; sorting the mail-like items for distribution to each of the other Jxe2x88x921 processing nodes associated with a geographical region corresponding to destination of each mail-like item; forwarding mail-like items destined for delivery in each of the plurality of regions to the respective regional processing node; receiving mail-like items from each of the other Jxe2x88x921 regional nodes designated for distribution within geographic region corresponding to the regional processing node; and forwarding mail-like items destined for delivery within the region corresponding to the regional processing node to a local distribution service.
In another aspect, the invention provides a method for distributing mail items, which mail items are created by a number of originators such as bulk mailers or letter shops for delivery to a number of recipients having different addresses through a postal service. The postal service, such as the U.S. Postal Service, has a set of postal regional sorting centers such as PandDC""s having an associated set of postal regions. The postal regional sorting centers sort incoming mail pieces which are then transported to local post offices within the associated postal region for delivery to the recipients. The method includes the steps of:
(a) receiving mail items from an originator at one of a plurality of private processing centers each having an associated set of one or more postal destination codes, wherein xe2x80x9cprivatexe2x80x9d refers to a processing center that is not part of the federal postal system;
(b) sorting the received mail items into groups by the sets of destination codes;
(c) transferring each group of mail items having a destination code different from one of those associated with the receiving processing center to the corresponding destinating private processing center;
(d) at each processing center, converting any mail items in data form transferred in step (c) and any mail items in data form having a destination code which corresponds to one of those associated with the destinating (receiving) processing center into mail pieces;
(e) at each processing center, sorting mail pieces from steps (c) and (d) together with any mail pieces received directly from originators having a destination code which corresponds to one of those associated with the receiving processing center into batches effective to reduce processing costs as compared to mailing the same mail pieces with the postal service in an originating entry unsorted condition and without mail pieces received from other processing centers; and
(f) delivering the batches to one or more of the postal regional sorting centers for delivery to the recipients.
xe2x80x9cProcessing costsxe2x80x9d as referred to in step (e) includes total postage and also labor and other costs of handling the mail pieces, often expressed in dollars per thousand mailpieces. According to a further aspect of such a method, processing costs are reduced and at the same time process productivity is increased. The latter can be measured as the number of mail pieces processed per unit time, such as per hour or per day.
Since one or more embodiments of the invention changes the working relationships between the local private processing centers and the federal post, it is understood and expected that the deadlines or cutoff times for entry of worksharing volumes into the postal service will of necessity be modified from present practice in order to effect service quality improvements and benefits to mailers and the public in general. Such deadlines include, for example, the time of day that presorted, predated batches of mail must be received in order to qualify for a volume discount. Transportation or other service discounts may be added or changed in order to encourage capital investment in the improved processes, methods and systems described by the present invention. Such changes have been made by the U.S. Postal Service and other forward-looking posts in the public interest and to sustain postal services as a vibrant, viable alternative communications medium.
According to a further aspect of this embodiment, each processing center has an associated data center that preferably communicates via a network such as the Internet with the other data centers, preferably by means of a central process data center that assimilates data from all data centers. Data concerning volumes of mail items to be transferred to other processing centers is transmitted from the data center of each processing center to the central process data center, which then calculates for each processing center, using the transmitted data, the total volumes of mail items to be transferred from other processing centers to that processing center. The central process data center then transmits to each processing data center data concerning volumes of mail items to be transferred from other processing centers to that processing center. These steps are repeated periodically (individual updates from data centers may be received intermittently). Each data center can then use the information received to estimate arrival times for mail items to be transferred to the processing center for that data center.
Another aspect of the invention is the extension of the present item ID number to include additional data elements such as postal class and type which, together or separately, allow either the private network system or federal post, for example, to track or trace the item, modify processing of the item(s), select or outsort the item(s) as desired during its transit through the federal or private network(s), and analyze effects of process methods, whether network based or localized, on particular mail or mail-like items on certain categories of such items. For example, tracking of categories such as registered, certified, xe2x80x9cspecial handling,xe2x80x9d priority, standard, first class, handwritten envelope, paper color, parcel, letter, flat, metered, permit, and international mail will be possible to a greater extent than at present. Such a result is achieved by extension of the ID number data elements and by processing such data in both real time and off-line contexts within the information network process described herein.
The invention further provides a method and system for allocation of cost savings for members of a network of processing centers such as the ones described above, which network generates a net savings in processing costs by transferring items between network processing centers prior to delivery to a final destination. Such a method includes the steps of:
(a) determining a value of labor performed by each processing center in processing of items received from or sent to other processing centers;
(b) determining a value of costs incurred by each processing center in processing of items received from or sent to other processing centers;
(c) determining a value of cost savings generated by each processing center by comparing an actual cost to a benchmark; and
(d) making balancing payments between entities controlling the processing centers based on a net of the values determined in (a), (b) and (c). The benchmark may be an estimated cost calculated based upon an assumption that the network did not exist. In a preferred embodiment, a financial clearinghouse entity receives deposit payments from entities controlling the processing centers and makes the payments of step (d) by making transfers between deposit accounts.